21 Oct The Three Phases of a Successful Product Launch (1/3)
We’ve helped companies around the world to launch new products and found that there are three phases to it. Just to be clear, when we talk about launch we mean the initial go to market period – the first 6 to 12 months immediately after the product first appears on store shelves. We call them the:
‘The aha’s or ah sh$&s of a new product launch’
“We’re often asked how can you optimize a product launch that has never been on the market before? There are too many unknowns.”
We’ve found that there really aren’t that many unknowns, once you structure the question right. If you know how consumers generally respond to new products; if you know how consumers respond to advertising; if you know how consumers respond to brand imagery then you can do a great job at predicting how they’ll respond to your launch as soon as it hits the marketplace.
This is where agent-based modeling and simulation comes in. At the core of agent-based modeling is the foundation of how a market works. How a consumer makes purchase decisions.
Marketers work by understanding how consumers make purchase decisions. Agent-based models work by simulating these consumer purchase decisions in a highly accurate way, based on how you’ve experienced your markets and categories in the past. When simulating a product launch it is these two key dimensions that drive the modeling and are the basis for an accurate simulation of the future with your product in it.
With this in mind, we define these 3 phases to a product launch
- Brain Phase: the pre-launch planning and development phase
- The Work Like Crazy Phase: the first 6 to 12 months immediately following the launch
- Love it or Leave it Phase: The go/no-go to success
- It’s wildly successful – everybody (in the company loves it). How can we help keep the party going
- It’s marginally successful – it’s doing okay, but not that great. How can we diagnose what’s wrong and help fix it
- It didn’t make it – the cockroaches are scurrying. We can help diagnose what’s wrong, help fix it, or support the no go decision making
The brain phase is typically when an agent-based model is built and simulations are run identifying key risk elements and how the brand manager can overcome them. They are typically done well after the product is complete and conjoints have been run. It’s now time to get the media right. Link tests are done, brand imagery trackers are in place.
Our process takes the brand through its paces based on what the actual advertising investment could be, what the brand imagery objectives are and what the expected distribution plan could be. With that in place, we can now run scenarios to see what the right media mix should be and what the best promoted price offerings could be, based on the distribution and brand imagery plan.
Our brain process starts by simulating a baseline plan. This tells us what the consumer response is for the initial, going-in media, pricing and distribution plans. Once this is complete we then optimize the media mix, pricing and distribution plan. This allows the brand to determine how much to invest in distribution versus media. No sense in having too much distribution, when there is no awareness. No sense in having too much media with no distribution. No sense in having advertising for repeat business when we can’t get trial going. It is a delicate balancing act that needs to be worked through to drive significantly greater early success for the nascent brand.
Once the media, distribution, pricing and message mix are optimized we run another set of scenarios based on what potential expected responses might be from the competition. This is where the fun begins. How will they respond? Will they even respond at all? Will they also launch a new product? All of these risks can now be played out at your desktop.
Brand teams can develop a complete risk portfolio to determine what could happen and what the best response might be given budgets and actions available to the brand. Instead of relying on often, faulty primary research that only measures opinions about a concept, agent-based modeling provides insight based on actual, in-market consumer behavior.
When an agent-based model is built and utilized during the brain phase the best results can be delivered and the first critical 6 to 12 months can now have the best chance of success.
In my next blog we’ll talk about the next critical phase of new product launch and that is the ‘Work Like Crazy’ phase. Here, we’ll find out how an accurate forecasting and simulation capability can help optimize tactics to help not only build revenue, but also build the brand.